A fine but critical point of potential disagreement with what McCaughey said is that the voluntary participation in the expanded CPP should be made the default option i.e. people should be automatically included though they could opt out if they deliberately chose to leave it. That way, just about everyone would be in it. To offer participation as a voluntary opt in, where you have to take action to join, would be next to useless as too few people would join. People need a Nudge as Thaler and Sunstein tell us in the eponymous book.

Disclosure: I own bank shares directly and in ETFs (and so does just about every Canadian in their equity mutual funds or ETFs) and I will be getting CPP, though not any expanded benefits if it is expanded on a pre-funded basis as I believe it should be done.

4 comments:

I was surprised by these comments as well. I liked your remark about pre-funded benefits. When I talk to current retirees, they often think that expanding CPP will give them more money, which likely won't be true.

Hi MJ, I don't know either how current retirees could imagine they should expect to get lots of benefits they have not saved for or earned. It sure wouldn't be fair to the next generation, your kids and mine, who would have to pay for such extras.

Frugal, I agree that "savings culture" needs to be resuscitated. Life would be fine for those who take its message to heart. The issue is those who don't. Is it fair for the savers to be required later to pay for the non-savers? I think we need a new 21st century version of the three little pigs story (http://en.wikipedia.org/wiki/Three_Little_Pigs) - not the one where the two unwise pigs get eaten, nor the one where they end up living in the wise pig's house. We need expanded CPP (pig financial house building codes) and wolf-control (financial system reform).